20 August 2017

Tourism Tax: What You Need To Know

After various setbacks, the government has finally decided that the tourism tax will be officially implemented from 1st September onwards. Find out how much the tourism tax will be, and the reason behind its implementation.

What is the tourism tax?

The tourism tax rate will be fixed and charged on a per-room and per-night basis. But it will not apply to homestays, premises maintained by religious institutions for non-commercial purposes, and premises (for example Airbnb) with fewer than 10 rooms. So this means Airbnb residences with 10 rooms and more will have to charge the customers the tourism tax.

Among the reason that the tourism tax is being implemented is due to the annual federal budget cuts that the Tourism and Culture Ministry has been subjected to. As such, the Ministry could benefit from added revenue in the form of additional charges. Additionally, the tax is said to be necessary because the government needs to lessen uncertainties in the oil-and- gas industry.

Revenue from the tax is said to reach around RM654.62 million, but the calculation is based on the assumption of 60% occupancy rate at the more than 11 million hotel rooms in Malaysia. The amount can reach RM872.82 million if the occupancy rate reaches 80 percent. Tourism and Culture Minister, Datuk Seri Nazri Aziz said the revenue collected from the tourism tax would be used to promote Malaysia overseas and to upgrade tourism facilities and its infrastructure development throughout Malaysia.

How much is the tourism tax rate?

The initial announcement was that the Tourism Tax will be imposed on all guests at all hotel rooms. But following an outcry from Malaysians, all Malaysians will be exempted from the tourism tax. The tourism tax will only apply to all international tourists who will be charged a flat rate of RM10 per night, per room for all types of accommodation.

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